Cotton pares gains after US inflation data lifts dollar

Oct 14 (Reuters) — ICE cotton futures pared gains on Wednesday after stronger-than-expected US inflation data lifted the dollar, with traders reassessing last week's bearish US Department of Agriculture World Agricultural Supply and Demand Estimates (WASDE) report. m. 25 cents per lb earlier in the session. "We've been a lot higher today.

So we've backed off... This morning, I think traders had decided that they're looking beyond the bearish WASDE of last Friday. They know that the US crop is below average, way below average," said Keith Brown, principal cotton broker at Keith Brown and Co. in Georgia.

"And then, but suddenly the inflation number, Consumer Price Index, came out and it was way above expectation. So that has driven the US dollar higher... thus cotton has come off some," Brown added. Cotton touched its highest level in more than four weeks earlier in the session.

The US dollar rose against major currency peers on Wednesday, after data showed US consumer prices increased in September on higher gasoline costs, raising the prospects of an interest-rate hike later this month. USD/ The stronger US dollar trimmed cotton's gains by making US supplies more expensive for overseas buyers, potentially dampening export demand. The USDA in its WASDE report on Friday raised forecasts for US cotton production and ending stocks, a development generally seen as negative for prices. Meanwhile, USDA's weekly crop progress report showed 31% of the US cotton crop had been harvested, up from 23% a week earlier and ahead of the five-year average of 29%.

The USDA also said 34% of the US cotton crop was rated good to excellent, up from 33% a week earlier. com;)